Eskom says can function with lower tariff hike

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Pretoria - Power utility Eskom is in a healthy enough financial and operational position to function on the 16% average tariff increase announced by the National Energy Regulator of SA (Nersa), it said on Friday.

The utility's performance would not be crippled by lower revenue in 2012, Eskom CEO Brian Dames said in Pretoria.

Eskom had initially asked for a 25.9% increase, but this was cut by 9.9% because of reduced sales volumes.

"We have had price increases greater than 25% for the past four years which has allowed us to build the reserves and to put together a fully funded expansion plan," said Dames.

He assured South Africans that the cut "would not jeopardise the objective of keeping the lights on" together with scheduled expansion projects.

Dames said Eskom supported the call by President Jacob Zuma for South Africa to have a national pact bringing together business, labour, municipalities and all communities in energy saving.

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